You might remember the old Looney Tunes cartoon: the Coyote tirelessly chases the Road Runner, but is never successful. Beep beep. Similarly, travel managers are relentless in their efforts to enforce their company’s travel program. However, very often, especially when it comes to accommodation, travelers avoid travel policy, like the Road Runner escapes from the Coyote.
A recent survey by Phocuswright says that less than 40% of business travelers booked via their company’s recommended providers. Non-compliant bookings, also referred to as ‘leakage’, cost thousands of dollars every year, representing one of the biggest challenges in today’s corporate travel world.
Convenience is one of the most-often cited reasons why business travelers book outside policy. As it may happen with their IT equipment, bloated with corporate software, we’ve come to a situation in which travelers are not entirely satisfied with the booking channels sanctioned by company travel policy. Often, when a new business meeting is set and travel plans must be arranged, travelers find it easier to google and head to any hotel website – or, the one they would most likely use for their own leisure needs. And, with a smartphone in their pockets 24/7, there are many booking channels available at the tips of their fingers.
How leakage impacts your business
Higher travel costs is the most immediate consequence of bookings outside the preferred channels. For example, businesses with high hotel leakage often face a higher fee structure. Travelers who don’t follow policy are likely to pay additional bookings fees and commissions. Those fees may double when amendments and cancellations need to be made if plans suddenly change. This is one of the reasons companies choose a corporate hotel booking tool like Hotelzon. With it, there are no additional booking, amendments or cancellations fees, and therefore, when travelers adhere to this channel, companies won’t have to pay extra costs.
Supplier negotiations are greatly affected by leakage. With everyone booking via different channels, travel managers will have less data on their global hotel costs. This means less power to negotiate with suppliers for competitive deals.
Finally, the security and safety of travelers can also be compromised. Travel managers back at the office will have troubles locating their travelers and discern if they are staying anywhere near where an emergency situation is happening.
How you can help employees make the right choice
- Technology is here to help. Offer your team the right tools to plan their travel. One that is easy to use and gives travelers the freedom to choose whilst prioritizing preferred hotels according to policy.
- Travel managers need as much data on hotel bookings as possible in order to increase cost control and have a global view on how the company travels. Choose a booking channel that offers extended reporting options.
- Do not ignore the power of communication. Make sure everyone within your company is well aware of the preferred booking channels. If there’s an available app for bookings, encourage your team to download it.